India’s second largest software exporter Infosys is undertaking a complete revamp of its products business under Michael Reh.Anirban Sen | ET Bureau | August 06, 2015, 08:28 IST

India’s second largest software exporter Infosys is undertaking a complete revamp of its products business under Michael Reh.India’s second largest software exporter Infosys is undertaking a complete revamp of its products business under Michael Reh.

It’s increasing investments to strengthen banking software Finacle’s footprint in the US, spending more on marketing brands and building new sets of products and solutions. It aims to generate $2 billion of annual revenue from products and new services by 2020.

Infosys may also build a new banking product under the Finacle umbrella for new-age payments banks in India, with the Reserve Bank of India (RBI) set to soon hand out new licences for these.

Earlier this year, RBI accepted applications from over 40 companies and individuals for payments banks. Telecom players like Reliance Industries and Bharti Airtel have also entered the fray and tied up with banks such as State Bank of India and Kotak Mahindra Bank.

“The new banking licences are coming up — it’s a massive opportunity, but it requires a completely different product,” said Reh, executive vice president at Infosys and CEO designate of products subsidiary EdgeVerve, in an interview on Wednesday.

At Finacle, Reh and his team is also exploring the use of the BlockChain database — the underlying technology platform behind virtual currency BitCoin. ET had reported in April that Infosys was planning to build at least three new offerings under the Finacle umbrella that would leverage the API (application programming interface) economy, banking-as-a-service and BlockChain.

Since joining Infosys last year and being tasked by CEO Vishal Sikka to give the products business a complete makeover, Reh has been responsible for overhauling existing processes at Finacle and helped Infosys win key deals through EdgeVerve. In the process, he has also hired key executives to strengthen EdgeVerve, including former SAP colleague Anirban Dey.

Reh, who joined Infosys in October, also said Infosys was moving toward a different payment model for its cloud product offerings, including options such as “pay-per-use” for customers.

“The expectations of the market for a cloud product are completely different,” said Reh, who spent nearly 15 years at SAP. “Ideally, you just want to go to the cloud, you Google, and whatever advertisement comes up normally is the one you click. And then it’s all about how seamless, how easy is it to register, getting a trial account, getting my payments in and then I convert my trial over 30 days into a production environment — it’s something we’re building into our products to be ready for the next generation.”

Reh, who previously worked with Sikka at SAP, said Infosys was aggressively looking to market Finacle in markets such as the US, where large banks like JP Morgan and Citigroup spend heavily on deploying banking technology systems and upgrading existing ones.

“The US is the market with the highest spend. We will continue investing in India which is an important market for us, but if we want to grow, we can grow outside of India as well. There are big opportunities out there, especially in the US. And the market is opening up, which is a good thing — they have legacy systems which are 20-25 years old. And that’s where we’re getting in,” said Reh.

On August 1, Infosys started integrating its Finacle unit with EdgeVerve to create one combined entity. Reh said the company was working on taking combined, bundled solutions to clients.

“Short term, there are these synergies and how soon we can start integrating one product set with another, with banks talking about digital marketing complaints and in EdgeVerve we have a solution for that. So, deep integration of that. But in the broader context of 2020, we want to be a major contributor in terms of numbers as far as topline and bottomline is concerned,” said Reh, a key part of Sikka’s broader plans to transform Infosys into a next-generation services firm.

Reh did not rule out the possibility of launching more new products under the EdgeVerve umbrella, but said that the unit’s biggest priority was to strengthen its existing line of products.

Another EdgeVerve executive familiar with developments said the unit would also soon launch another new line of products. Currently, there are six sets of products under the EdgeVerve umbrella — AssistEdge, BrandEdge, CreditFinanceEdge, InteractEdge, TradeEdge and ProcureEdge.

“We are continuing with these six products — we do close collaboration with our customers. The likelihood that you build specific features of an industry or vertical into your product is very high — we continue building capabilities for these six products. Will we end up with another set of solutions tomorrow? I will not say no to that, but that is not our focus,” said Reh.

Finacle currently generates about $300 million in annual revenue, according to estimates by research firm NelsonHall.